How many extensions can I obtain for finding a site for my Azal Coffee franchise?
Azal_Coffee Franchise · 2024 FDDAnswer from 2024 FDD Document
ur location or your business.
If we cannot agree on a site and you have not obtained a site for your Franchise Business within 3 months of the date of the Franchise Agreement, we may terminate the Franchise Agreement. However, if you anticipate that you will not obtain a site within 3 months after the date of the Franchise Agreement, you may obtain a 3-month extension of the deadline. In order to obtain the extension, you must, no later than 30 days before the end of the 3-month period: (a) notify us in writing that you intend to extend the deadline; and (b) pay us a nonrefundable fee of $5,000 for the extension. You may not obtain more than one 3-mon
Source: Item 11 — FRANCHISOR'S ASSISTANCE, ADVERTISING, COMPUTER SYSTEMS AND TRAINING (FDD pages 27–36)
What This Means (2024 FDD)
According to Azal Coffee's 2024 Franchise Disclosure Document, if you are unable to secure a site for your franchise within the initial 3-month period from the date of the Franchise Agreement, you have the option to request a one-time extension. To obtain this extension, you must notify Azal Coffee in writing of your intent to extend the deadline at least 30 days before the end of the initial 3-month period. Additionally, you are required to pay a non-refundable fee of $5,000 for this extension.
This extension provides an additional 3 months to find a suitable location. However, the FDD explicitly states that you may not obtain more than one 3-month extension. This means that if you still haven't found a site after the extension period, Azal Coffee has the right to terminate the Franchise Agreement.
This policy is fairly common in franchising, as it protects the franchisor's interests by ensuring franchisees move forward in a timely manner. The non-refundable fee for the extension incentivizes franchisees to actively search for a location within the initial timeframe while providing a safety net if more time is needed. Prospective Azal Coffee franchisees should factor this potential cost into their initial investment calculations and be prepared to diligently search for a suitable location to avoid losing their franchise rights.